using critical metrics to maximize your business
Post on 03-Jan-2016
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Using Critical Metrics to Maximize Your Business
Training
» What- What are the most important metrics to be watching? And how frequently?
» Why? Running your business blind is a bad idea!» How? Where can this information be obtained?
» We live in an information driven society.» Knowledge Economy- Billion $ Economy» Companies like Google, Intel, & Ericsson value their
data as much as service/product they provide.» AT&T
» Data is Valuable For These Reasons˃ Data Aggregation˃ Risk Management˃ Digital Experience˃ Operational Agility˃ Cross Selling
Christmas Decor’s Key Indicators (Metrics)» Marketing ROI» Retention Rates» Sales Closing Percentage» Average Sale» Gross Profit» Average Daily Production
What
Christmas Decor’s Key Indicators (Metrics)» Marketing ROI
˃ Measures how effective your marketing campaigns are+ Individually+ Collectively
˃ Provides intel for future campaigns+ Content+ Timing+ Targets
» System Avg is $10:$1
What
» Retention Rates˃ Identifies rate of returning business- LIFEBLOOD of Christmas Decor
+ Year Over Year+ Can be measured by count+ Or by dollars
˃ Provides info for budgeting˃ System Average is 73%
What
» Sales Closing Rate˃ Measures how efficient your sales efforts are
+ Are you missing too many opportunities+ Gauge of sales cycle+ Identifies top/low performers+ Allows for adjustments
– Marketing Target– Presentation– Pricing
+ System Average is 52%
What
» Average Sale Amount ˃ Average of all sales to date
+ Useful for budgeting going forward+ Useful in conjunction with sales closing rate
– Hi Closing + Low Avg Sale= Poor Outcomes+ Creates Standards
˃ System Average= $1389
What
» Gross Profit˃ Revenue less materials and labor (our standard definition)
+ Adjust ratio of these 2 components˃ Foundation for profitability˃ 55%
What
» Average Daily Production˃ Revenue installed per day per crew˃ Indicator of productivity˃ Directly correlates to profitability˃ Improves use of limited operation time˃ System Average= $2339 (blended average)
What
» Lessens decision cycle» Increases revenue» Lowers operating costs» The bottom line IS the bottom line- Leads to
profitability
Why
» Marketing ROI˃ As a ratio: Total Revenue/ Total Cost
+ EX: $10,000 Sales/ $1,000 Marketing Cost= 10:1 ratio˃ Must track every campaign/tool and service˃ Track Lead Origination & Record
+ Train Staff to ask+ Use campaign identifiers
How
» Marketing Campaign Report˃ Quantifies campaign results for you˃ Exportable for further analysis˃ Requires front end work, but yields HUGE back end results˃ Must preserve data integrity for quality results
How
» Retention Rates˃ (Current Year Sales/ Previous Year Sales)x100= Retention Rate
+ Customer Count+ Dollars+ Or BOTH
˃ Requires accurate records of years being measured
How
» Retention Rates˃ LightRight’s Customer Retention Report
How
» Sales Closing Rate˃ (Accepted Orders/ Proposed Orders)x 100˃ Requires thorough record of interactions
+ May require office to handle sales call scheduling+ ALL interactions need to be recorded- even the unqualified
How
» Sales Closing Rate˃ Sales Closing Report˃ Tracks sales staff progress˃ Only useable if all interactions are recorded˃ System generates accurately as long as all orders in input
How
» Average Order Amount˃ Total revenue / number of orders˃ Requires meticulous record keeping
How
» Gross Profit˃ Total Revenue – materials-labor= gross profit
+ Overall GP+ By job
˃ Requires detailed record of materials used, including IAC˃ Detailed Record of labor- hours worked & rates paid
How
» Job Costing Report˃ Generates per job gross profit
+ Includes all materials+ Includes all labor, including take down
˃ Investment in tracking crucial info offers significant payoff!
How
» Average Daily Production˃ Likely the most mis-understood metric in our system˃ Total Revenue/ total # of crew days= ADP
+ Total Crew Days= aggregate total of days worked per crew˃ Requires close tracking of crew activity, inside and outside of Christmas
Decor business
How
» Productivity Report˃ Only tracks days crew worked
How
» Use systems designed to track data/yield reporting» Only complete and accurate input will yield
accurate reports» Use data for operational agility and develop deeper
business» Identify indicators that are important to your
business
Best Practices
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